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Britain and world set for hard landing

FEARS are growing of a sharp slowdown in the global economy, triggered by big increases in energy prices and rising interest rates. Economists at HSBC say there is a greater risk of a “hard landing” for both the world economy and Britain.

Oil prices hit a record of more than $78 a barrel on Friday, driven up by the escalating Middle East conflict. At the same time the Bank of Japan ended its zero interest-rate policy by raising its key rate, for the first time in six years, to 0.25%.

The Japanese move was a further signal that the global era of cheap money is over. Analysts will be scrutinising testimony in America by Ben Bernanke, the Federal Reserve chairman, for clues on the likely peak in US interest rates, currently 5.25%.

According to HSBC, the risk is of monetary “overkill” with central banks raising rates too much. “There is